From October 22 to November 1, the Shanghai and Shenzhen stock markets have seen a break in new stocks for seven consecutive trading days, either new stocks on the science and technology innovation board or new stocks on the ChiNext board. The phenomenon of new stocks breaking for many consecutive trading days has been very rare in recent years. It is worth noting that these are new stocks under the registration system. Personally, I think that the outbreak of new stocks under the registration system will force the restructuring of the market pattern.
Among the 9 new stocks that broke, there were 5 on the Science and Technology Innovation Board and 4 on the ChiNext Board. Some open to break, such as Zhongzi Technology; some break seconds after opening, like cutting-edge shares. Moreover, the break of new stocks has also shown an increasingly fierce trend. The largest intraday break of Zhongzi Technology on the 22nd reached 16.9%, while the maximum breakage of Chengda Bio listed on the 28th was more than 28%. The winning investors did not share the dividends of the new shares, but instead lost money due to the winning.
In fact, the breakdown of listed stocks this year has become the norm. For example, among the nearly 400 new stocks listed this year, more than 40 have broken. But the vast majority of the more than 40 stocks broke out after listing for a period of time, rather than at the opening. Obviously, this is also different from the 9 new stocks that broke on the same day as they were listed.
Under the registration system, there was a wave of breaks on the first day of the listing of new shares, and the reasons for this were manifold. For example, the issuance and listing of new shares has accelerated this year. Compared with the same period last year, the number of new stocks listed this year is higher than last year. The listing of more new shares also makes the market feel overwhelmed, and the market also has a sense of numbness to new shares, which is obviously not conducive to new stocks.
The herd effect of the market downturn and the break cannot be ignored. Although the Shanghai and Shenzhen stock market transactions in recent trading days have returned to the trillion mark again, the popularity of market transactions does not mean the popularity of the market. In fact, only a few stocks have performed eye-catchingly in recent times, and the entire market has shown a downturn. Moreover, after the break of new stocks, it is easy to produce a herd effect in the market, which also has a very adverse impact on the listing of new shares.
In addition, the impact of the introduction of new rules on inquiries. On September 18, the Shanghai Stock Exchange issued the newly revised Implementation Measures for the Issuance and Underwriting of Shares on the Science and Technology Innovation Board of the Shanghai Stock Exchange, the Guidelines for the Application of the Rules for the Issuance and Underwriting of the Science and Technology Innovation Board of the Shanghai Stock Exchange No. 1 - Initial Public Offering of Shares, and on the same day, the Shenzhen Stock Exchange also issued the newly revised Implementation Rules for the Issuance and Underwriting of Securities on the Growth Enterprise Market. The New Rules for Inquiries not only create conditions for flexible pricing of new shares, but also conditions for new shares to be issued at a higher price.
The outbreak of new stocks under the registration system will undoubtedly lead to the restructuring of the market structure. On the one hand, investors will be more cautious about new ones. In the context of the "undefeated new stocks" myth being broken, winning the lottery is no longer like "winning the lottery", but may face the risk of breaking. Hitting the new will not only not get the dividend of the new shares, but may also lose money, which will invisibly have a warning effect on the investor's new hit.
On the other hand, the emergence of a wave of new stocks will force the pricing of new stocks to be more rational. There is a demand for self-interest maximization, whether it is an issuer or an intermediary, it is undoubtedly hoped that new shares can be issued at a higher price. However, if the new stock breaks at the opening or breaks on the day of listing, it will not only have a negative impact on the issuer, but also have an impact on the brand, image and reputation of the intermediary. Based on this, issuers and intermediaries will be more rational in determining the issue price of new shares.
The outbreak of new stocks will also reduce the expectations of issuers to raise funds. For issuers, there is clearly a desire to raise more funds, which is beyond doubt. However, since the beginning of this year, a number of issuers have experienced insufficient fundraising, and after the emergence of the breaking tide, it is undoubtedly impractical for issuers to still intend to have a huge over-offering phenomenon. Determining a reasonable issue price to meet the financing needs of the fundraising project should be the target of the issuer.
In addition, the wave of new stock breaks not only puts forward new requirements for the sponsorship work of intermediaries, but also tests the pricing ability of intermediaries. In addition to market factors, the quality of the issuer is crucial. In general, new stocks with insufficient performance and growth in the industry have an invisibly much greater probability of breaking. In this way, the sponsoring institution will be forced to choose the best sponsorship, which will help improve the quality of the listed company.
The breakout of new shares is also closely related to their issue price. For example, among the 9 new stocks that broke, many of them had higher issue prices, which also laid the groundwork for the break. Although the new shares under the registration system are market-oriented, they also test the pricing power of intermediaries. Low pricing affects their own interests and may lead to insufficient fundraising. High pricing can lead to breakouts. Therefore, it is also indispensable for intermediaries to improve their pricing power.